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Canada

industry newcomer starts big in Quebec -- Private company aims to provide wind projects with financial legs

A Toronto-based company says it will build a 200 MW project in Quebec's Lower St Lawrence region, adding to the province's already significant commitment to wind energy development. All the output of the project will be bought by Hydro-Quebec Production under a 21 year power purchase agreement.

Toronto-based SkyPower Corporation says it will build a 200 MW project in Quebec's Lower St Lawrence region, adding to the province's already significant commitment to wind energy development. All the output of the project will be bought by Hydro-Quebec Production under a 21 year power purchase agreement (PPA), says SkyPower CEO Kerry Adler. Although Adler will not reveal the price the utility will pay, he says it is "around six cents."

SkyPower, a privately held company founded in 2003, is a relative newcomer to the wind business. But it has some aggressive goals, setting a corporate target of 5000 MW of installed wind capacity by the end of 2009. It has "invested a heck of a lot of money" towards that objective, says Adler, and now has 19 projects at various stages of development in Canada and two in the United States with a combined capacity of 4700 MW. "Some are at PPA, some are close to PPA, some are very early, some are mid-stage, some we have a year of measurements under our belts and some we have two," says Adler.

Many of the projects are joint venture partnerships with companies or communities looking for a financial partner to bring projects to fruition. "We are very much open in terms of our ability to fund these types of projects and bring them to reality," Adler says. "That is what our vision is, to be able to take projects that are out there today that maybe don't have the legs they need, maybe don't have the expertise they need, because, let's face it, coming up with C$300 million is a skill."

Wealth of experience

SkyPower, he says, has a board with a wealth of experience financing, building and managing large multinational projects. SkyPower's chairman, David Kassie, is a former vice-chair of the Canadian Imperial Bank of Commerce and former CEO of CIBC World Markets, its global investment banking arm. The board also includes Toshinori Ikebe, the former head of a joint venture between Japan's Nichimen Corporation and NEG Micon that developed more than 2000 MW of wind in the US and Europe, and Wall Street financial consultant Warren Spar. Advising the board is Steve Gilchrist, the alternative energy commissioner in the last Ontario government. "We decided to leverage some of that experience and build a company that is focused on wind power," says Adler.

Declining technology costs, increasing electricity prices, finite fossil fuel supplies, a stronger Canadian dollar, and growing political interest have combined to make wind power a viable alternative, he says. "It has never really been a business, until the last six to nine months, where people could see making money, in this country at least."

Turbine selection

SkyPower's just announced C$300 million project for Lower St Lawrence will be located near the community of Rivière-du-Loup. Construction of the first 9 MW will be in late 2005 or early 2006, with the balance of the project completed by the end of 2006. SkyPower has not yet selected a turbine for the project, says Adler. "When we finalise a manufacturer, then we'll be able to release a schedule that is more definitive."

Hydro-Quebec recently selected two developers to build 990 MW of wind capacity in Quebec using technology from GE Energy. It plans to issue a call for another 1000 MW soon (Windpower Monthly, November 2004). The province is currently adding 99 MW of wind to the 113 MW now installed.

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